American Shale Producers Continue to Absorb Each Other
According to Reuters, ConocoPhillips would like to buy CrownRock for $10-15 billion
But ConocoPhillips is not the first contender for the hand of this shale company. Diamondback Energy, Devon Energy, Marathon Oil and Continental Resources also wanted to compete for her favor, but were unable to reach an agreement. However, agency sources claim that the number of buyers may increase.
CrownRock has an impressive 86,000 net acres in the northern Midland Basin of Texas, the largest part of the Permian Basin.
ConocoPhillips itself has a lot of capital in Perm. It was the third largest oil producer in the Permian after Pioneer and EOG Resources. Therefore, the consolidation of holdings promises great benefits.
Diamondback and Devon were only the sixth and seventh largest shale producers.
The agency recalls that this is the third takeover of a major shale producer in October.
Let us recall that ExxonMobil acquired Pioneer for $60 billion, Chevron bought Hess for $53 billion.
Experts believe that consolidation in the shale sector is inevitable, since the most “tasty” deposits are running out. Now, production in this sector requires greater capitalization, so smaller companies allow themselves to be swallowed up.
In this case, their management is left with money, and not with debts, which will increase if the cost of producing raw materials increases.
